The Fertilizer Institute on Sept. 23 submitted a statement to the ranking members of the House Committee on Transportation and Infrastructure defending its relationship with the Pipeline and Hazardous Materials Administration (PHMSA), as well as the special permit procedures that PHMSA follows.

TFI issued the statement in response to critical remarks made at a Sept. 10 hearing held by the committee, “Concerns with Hazardous Materials Safety in the U.S.: Is PHMSA Performing its Mission?” The hearing was held to examine the administration of the special permits and the approvals program that is facilitated by PHMSA. It also examined the role of trade associations in obtaining special permits on behalf of their members.

Committee Chairman James Oberstar (D-Minn.) and DOT Inspector General Calvin Scovel III were particularly critical of PHMSA at the hearing, citing the results of investigations conducted by Congress and the Office of the Inspector General. “This agency needs a house cleaning,” Oberstar said, according to The New York Times. Oberstar said PHMSA has “lost its way and along the way has developed a very cozy relationship with the industry it regulates.”

According to the Times, Oberstar and Scovel said PHMSA has been issuing permits without reviewing companies’ prior incident and enforcement histories; has been too generous in issuing and regulating special permits; in some cases does not know where the permits are being used; grants special permits to trade organizations that can pass them along to members in a blanket fashion; and relies on self-certification by the special permit applicants.

In its letter, TFI outlined the importance of having a professional and respectful relationship with PHMSA, and also described the value and increased safety measures that have been achieved as a result of the two special permits that TFI has obtained on behalf of its members. The permits were issued in 1994 and 2005, and both involved anhydrous ammonia nurse tanks. In both cases, TFI said the permits enhanced safety and compliance with DOT regulations for its members.

“In our opinion, government and industry working together cooperatively to achieve the highest level of safety is the most effective approach to hazardous materials transportation,” TFI said. “TFI works with PHMSA in a professional manner, respecting its mission, to make sure fertilizers are transported safely. We believe that such a working relationship with PHMSA is a critical member service.”

The oversight hearing was held as the committee prepares legislation to reauthorize the hazardous materials safety program, which expired last September. That legislation is expected to be included as part of the surface transportation bill, which was released in draft form in June.

DOT Secretary John Pocari said at the hearing that he was aware of the permitting procedures, and that the DOT is conducting a review of PHMSA policies and procedures and will make necessary revisions. The DOT is also clarifying agency policy to ensure trade associations do not hold special permits, Pocari said, and it is overhauling the data and information technology systems in place to enhance productivity and accountability.

“As the Committee further considers these issues, we urge you to take into consideration the accomplishments of PHMSA and the necessity of the special permits and approvals office,” TFI concluded in its letter.

Growers have until Sept. 30 to sign up for the first enrollment period of the new Conservation Stewardship Program (CSP), which includes incentives for farmers who use controlled-release or slow-release nitrogen fertilizer products.

CSP is a voluntary program administered by the USDA’s Natural Resources Conservation Service (NRCS) to provide financial assistance to agricultural and forestry producers who maintain existing conservation activities and adopt additional ones in their operations. CSP was created by the 2008 Farm Bill and replaces the former Conservation Security Program.

The new CSP program lists the application of controlled release nitrogen fertilizer on cropland and pasture land as a “water quality enhancement activity” that is eligible for government assistance. “CSP offers an enhancement – or payment program – for farmers who use controlled-release or slow-release nitrogen,” reported Agrium Advanced Technologies (AAT), which manufactures ESN®, a branded polymer-coated urea product designed for the agricultural market. “NRCS will determine the payment rate at the end of the initial sign-up. It is expected to be between $12 and $22 per acre of cropland.”

According to guidelines listed on the NRCS web site, applicants for the incentive must use slow-release or controlled-release nitrogen products on all treatment acres, and must have a soil test that is no more than five years old for each treatment area, or field. To qualify, NRCS specifies that nutrient application rates must be “within the Land Grant University recommendations based on soil testing and established yield goals and considering all nutrient sources.” In addition, NRCS says soil surface disturbance must be minimized during nitrogen placement.

“Nutrient management effectively utilizes available nutrient resources to supply crops with nutrients required to efficiently produce food, forage, fiber, and cover while minimizing environmental degradation,” NRCS says on its web site. “The use of slow or controlled release nitrogen fertilizer makes nitrogen available to plants over a longer portion of the growing season to match the plant uptake needs. This limits the loss of nitrogen to leaching and denitrification, and can help control soil emissions of the greenhouse gas nitrous oxide.”

Documentation requirements under the program specify that for each treated field, growers must list the fertilizer product used; the exact treatment acres; soil test results; the crops grown and the yields, both sought and measured; verification of properly-calibrated fertilizer application equipment; and the nutrient application rates and application dates for each treatment area. In addition, growers must provide a map showing the acreage involved.

“Growers are already dedicated stewards of the land, and we are very pleased to see the government rewarding them for doing the right things to keep farm and rural lands healthy,” said Jeff Novak, AAT’s director of marketing. “We are also proud that our products assist them in achieving these goals.”

Growers interested in the program can complete a checklist available at the NRCS web site at http://www.nrcs.usda.gov/programs/csp/. NRCS is offering a continuous enrollment for the program; sign-up for the next fiscal year begins Oct. 1. Landowners who sign up before the Sept. 30 deadline will have until the end of October to complete program eligibility.

The new CSP is available to all producers nationwide. Eligible lands include cropland, grassland, prairie, improved pastureland, non-industrial private forestland, and agricultural land under the jurisdiction of an Indian tribe. Congress capped the CSP acreage enrollment at 12,769,000 acres for each fiscal year nationwide. Payments administered through the CSP carry a $40,000 annual limit per farmer, and a $200,000 limit over the grower’s five-year contract.

PotashCorp, on Sept. 18 after the close of the markets, announced revised earnings guidance of $3.25-$3.75 per share for full-year 2009, shifting from a range of $4.00-$5.00 per share provided in July 2009. It said the change primarily reflects lower-than-forecasted potash sales volumes due to continued slow demand and limited restocking by fertilizer distributors around the world. Over the past 12 months, nearly 20 million mt of potash production has been curtailed by global producers.

PotashCorp said 2009 earnings are still expected to be among the best in company history, despite an anticipated decrease of 60 percent in year-over-year potash volumes and an 85 percent decline in combined phosphate and nitrogen gross margin. Earnings for third-quarter 2009 are expected to be at the low end of the $0.80-$1.20 per share guidance range previously provided.

The company said potash inventories that can be measured in the retail chain, which excludes less easily identified inventories in China, have been largely eliminated, and potash levels in soils around the world have been significantly reduced. This creates a progressively higher risk to crop yields as soil fertility is continually diminished. While the immediate impact has been masked by good weather and residual soil nutrient levels in markets with healthy long-term fertilization and agronomic practices, such as the U.S. and Australia, yields for key crops in several other major growing regions are expected to be substantially below 2008 levels. A significant rebound is required to address this situation, and the company expects 2010 global potash demand to be in the range of 50-55 million mt.

In other news, on Sept. 23 the company announced that it plans to raise $1 billion in two offerings – one offering of $500 million in 3.75 percent notes due Sept. 30, 2015, and another $500 million in 4.875 percent notes due March 30, 2020.

PotashCorp intends to use the net proceeds to repay outstanding indebtedness under revolving credit facilities and for general corporate purposes. The offering is expected to close on Sept. 28, 2009.